Profound Medical Corp. Announces Definitive Agreement With Royal Philips Electronics N.V. To Expand Collaboration And Acquire Sonalleve MR-HIFU Business
TORONTO, June 30, 2017 (GLOBE NEWSWIRE) -- Profound Medical Corp. (TSXV:PRN) (OTCQX:PRFMF) (“Profound”) announced today that it has entered into a definitive agreement (the “Agreement”) to expand the existing collaboration between the two companies and acquire Royal Philips’ (NYSE:PHG) (AEX:PHIA) (“Philips”) Sonalleve MR-HIFU business (the “Proposed Transaction”), establishing Profound as a market leader in Magnetic Resonance Ultrasound (“MR-Ultrasound”) ablation therapy.
Sonalleve MR-HIFU is an innovative therapeutic platform that combines real-time MR imaging and thermometry with thermal ultrasound to enable precise and incision-free ablation of diseased tissue. Sonalleve MR-HIFU is CE marked and has historically been marketed by Philips primarily for non-invasive ablation of uterine fibroids. MR-HIFU, as a technology, has also been shown to have clinical application in other medical conditions, including non-invasive ablation of abdominal cancers, hyperthermia for cancer therapy and palliative pain treatment of bone metastases.
Under terms of the Agreement, which is subject to a number of conditions precedent, Philips will transfer its Sonalleve MR-HIFU assets to Profound for an upfront consideration of 7,400,000 common shares (the "Common Shares") of Profound at a price of CDN$1.10 per Common Share, representing a premium of approximately 22% over Profound's closing stock price on June 29, 2017. The Agreement also includes certain earn-out provisions tied to future revenue levels, which Profound currently expects will result in it paying additional consideration to Philips in a range of 5%-to-7% of Sonalleve MR-HIFU product sales, in cash, through to the end of 2020.
Upon closing of the Proposed Transaction, Philips and Profound will also expand their non-exclusive strategic sales relationship to include distribution of Sonalleve MR-HIFU. Philips already distributes Profound’s TULSA-PRO® system, which is designed specifically for ablation of prostate tissue and also uses real time MR imaging with thermal ultrasound for precise ablation. For a limited time following the transition of the business to Profound, Philips will also provide other services, including, but not limited to, manufacturing and installation.
The Proposed Transaction further expands Profound’s core competency in MR-Ultrasound ablation therapy. Profound will become the only company to provide a therapeutics platform that provides the precision of real-time MR imaging combined with the safety and ablation power of directional (inside-out) and focused (outside-in) ultrasound technology for the incision-free ablation of diseased tissue. The Proposed Transaction also represents an opportunity for Profound to immediately transition from a development-stage to a growth-stage company.
“This agreement with Philips is in keeping with our commitment to invest in the powerful combination of real-time MR-guidance as the imaging platform and ultrasound as the energy source for delivering non-invasive ablative technology to clinicians,” commented Dr. Arun Menawat, Profound’s CEO. “These key technology pillars, linked with intelligent software and robotics, have the potential to fulfill various unmet needs of patients and clinicians in many anatomies and disease states. At Profound, we see a world where patients no longer need to choose between living well and living long, or between undergoing clinically effective procedures and returning quickly to their normal lives. By leveraging MR-guidance and ultrasound to deliver incision-free, safe, personalized, precise, fast and cost-effective therapeutic solutions, I believe we are well on our way towards realizing that vision.”
Dr. Menawat continued, “From a commercial perspective, taking this technology platform approach not only benefits Profound by significantly increasing our total opportunity size, but also benefits hospital customers by providing them with the ability to better utilize their MR system assets. In addition to the immediate contribution this transaction will make to our revenue base, we believe that it will also help accelerate our growth going forward.”
“We strive to provide clinicians with a broad portfolio of targeted therapy solutions for the treatment of complex diseases such as cancer,” said Rob Cascella, Chief Business Leader Diagnosis and Treatment at Royal Philips. “We recognize the broader value MR-guided HIFU therapies can bring to clinicians and their patients, and we appreciate Profound’s strengths in the area of MR-guided ultrasound ablation therapy. We believe that the increased scale of the business as a result of the transfer of Philips’ MR-HIFU activities to Profound and the resulting enhanced close collaboration will accelerate the development of new clinical applications for this promising technology, while better serving the needs of our current and future MR-HIFU customers. We look forward to our continued participation in the future of MR-HIFU via both our collaboration with, and minority shareholdings in, Profound.”
Profound is currently conducting a pilot commercial launch of TULSA-PRO® in key European and other CE mark jurisdictions. The Company is also sponsoring a multicenter, prospective FDA-registered clinical trial, TACT, which is designed to further demonstrate the safety and effectiveness of this innovative technology. If successful, TACT is expected to support Profound's application to the FDA for approval to market TULSA-PRO® in the United States.
About Profound Medical Corp.
The Profound Medical team is committed to creating the powerful combination of real-time MR-guidance as the imaging platform and ultrasound as the energy source for delivering non-invasive ablative tools to clinicians. These key technology pillars, linked with intelligent software and robotics, have the potential to fulfill unmet needs of patients and clinicians in many anatomies and disease states, including prostate cancer, uterine fibroids, and bone metastases. Our mission is to profoundly change the standard of care by creating a tomorrow where clinicians can confidently ablate tissue with precision; a tomorrow where patients have access to safe and effective treatment options, so they can quickly return to their daily lives.
Profound Medical is commercializing a novel technology, TULSA-PRO®, which combines real-time Magnetic Resonance Imaging with transurethral, robotically-driven therapeutic ultrasound and closed-loop thermal feedback control that is designed to provide precise ablation of the prostate while simultaneously protecting critical surrounding anatomy from potential side effects. TULSA-PRO® is CE Marked and Profound is sponsoring a multicenter, prospective FDA-registered clinical trial, TACT.
Forward-Looking Statements
This release includes forward-looking statements regarding Profound and its business which may include, but are not limited to, the expectations regarding the efficacy of Profound’s technology in the treatment of prostate cancer. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of the management of Profound. The forward-looking events and circumstances discussed in this release, may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, including risks regarding the pharmaceutical industry, economic factors, the equity markets generally and risks associated with growth and competition. Although Profound has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. The Proposed Transaction is subject to a number of conditions precedent. There can be no assurance that the Proposed Transaction will be completed as proposed or at all. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Profound undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, other than as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts For further information, please contact: Stephen Kilmer Investor Relations skilmer@profoundmedical.com T: 647.872.4849 Or Rashed Dewan Vice President, Finance T: 647.476.1350